Q-We’re in our 50s and planning for retirement. Can you recommend several income stock funds with good yields?
A-You can have your cake and eat it, too. Some solid income investments also feature capital appreciation.
Among quality stock funds paying monthly dividends with yields of more than 7 percent are Franklin Income I, Stratton Monthly Divide and Shares and Smith Barney Premium Total Return A, according to Norman Fosback, editor of the Mutual Fund Forecaster and several other investment letters.
Each fund has its own way of meeting its goals. For example, Franklin Income I, which requires a 4.25 percent “load” (initial sales charge), is investing 35 percent of its portfolio in the stocks of utilities and consumer durable manufacturers, the rest in Treasury bills and junk bonds.
The no-load Stratton Monthly Dividend Shares, on the other hand, is basically a utility fund. Smith Barney Premium Total Return A, which requires a 5 percent load, has three-fourths of its assets in stocks of 10 different industries, the rest in money-market securities and some bonds.
“The concept of looking at equity funds for income is a sound one because you should be gaining some capital appreciation as well, and bond funds don’t really give you that,” explained Fosback. “However, if you really need higher income in the 10 to 11 percent range, the only ticket these days is a junk bond fund.”The Institute for Econometric Research, 2200 S.W. 10th St., Deerfield Beach, Fla. 33442-8799, publishes eight investment letters and Mutual Funds magazine.
Q-I was contacted by someone with the CFP designation who offered guidance in my personal planning. What exactly does the CFP mean?
A-It’s the Certified Financial Planner designation, given to investment professionals who have mastered such topics as financial planning, insurance, investment, income tax, retirement planning and estate planning.
Would-be CFPs generally complete coursework over a one- to five-year period at one of 30 schools around the country before sitting for a comprehensive examination. Experienced individuals with other professional licenses are also allowed to take it.
“The CFP designation includes the educational requirement, examination, work experience and the signing of a code of ethics,” explained Marina Sickes, a spokesperson for the Certified Financial Planner Board of Standards in Denver. “To verify whether someone actually has the CFP designation, telephone our offices at 303-830-7543.”
Whether or not the investment professional you’re dealing with is a CFP, you must always find someone compatible with your own goals and personality. Also be sure to learn upfront whether you’re simply to be charged by the hour for a plan or whether you’ll be sold investments as well.
Q-Could you please tell me the names of the companies that offer “no-load” stocks? I’d like to know.
A-You and an army of readers would like to know. This has been one of the most-asked questions of 1995 following my explanation of the concept of brokerless stock purchases in the column earlier this year. Be sure to clip out the information this time around.
Any investor in the country can make direct-from-the-company initial stock purchases of shares in dividend reinvestment programs of the following firms: American Recreation Centers Inc., Arrow Financial Corp., Atlantic Energy Inc., Atmos Energy Corp., Barnett Banks Inc., COMSAT Corp., Dial Corp., DQE Inc., Exxon Corp., Houston Industries Inc., Interchange Financial Services Corp., Johnson Controls Inc., Kellwood Co., Kerr-McGee, Mobil Corp., Motron International Inc., NorAm Energy Corp., Pinnacle West Capital Corp., Portland General Corp., Regions Financial Corp., SCANA Corp., Tenneco Inc., Texaco Inc., U.S. West Inc. and UtiliCorp United Inc.
Contact the firms directly. Some other companies limit direct initial stock purchase to certain states or their own utility customers. This information is from the DRIP Investor newsletter, 7412 Calumet Ave., Hammond, Ind. 46324. Subscription to the newsletter is $59 annually, which includes a copy of the book “No-Load Stocks” by editor Charles Carlson.
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Andrew Leckey answers questions only through the column. Address inquiries to Andrew Leckey, “Successful Investing,” Suite 332, 2124 Broadway, New York, N.Y. 10023.
